When a resident appears in the mini-map with a green check mark (v) instead of a dot does this...

[examining]

..mean he is actually flying?  Or what?

[Rolig Loon]

Dots indicate that avatars are approximately at your height. A ^ indicates they are higher than you, and v indicates lower. "Higher" does not mean "flying", because they might be simply standing on land or a structure that is above your elevation. Yellow dots are friends, others are in green (and if you are using Firestorm, blue indicates a Linden or mole).